McDonald's CEO Needs an Hour To Earn What The Crew Makes a Year -- How To Change That?

source: Pixabay

The international fast-food chain McDonald's Corp. is among the U.S. companies that pay its workers the least, a recent report by the U.S. Securities and Exchange Commission found out.

According to the data, McDonald's CEO, Stephen Easterbrook, was paid USD 15.9 million in 2018. In other words, that makes 2,124 times the average employee salary of USD 7,473. It means that Easterbrook makes an hour what it takes a median employee to earn in a year, the public company intelligence firm MyLogIQ estimated.

MyLogIQ's also added that Easterbrook's remuneration is the sixth-highest among chief executive officers in the country. Easterbrook made USD 21.8 million in 2017.

The fast-food chain has over 36,000 locations worldwide and employs over 210,000 people. In a recent statement, the company announced that its median employee in 2018 was a part-time team member located in Hungary, Central Europe. 

In 2018, McDonald's reported USD 21 billion in revenue, down 7% from 2017. The net income increased by 11% the company added, noting it reached USD 5.9 billion.

For comparison, the average household disposable income per capita in Hungary is USD 16,821 per annum, the Organization for Economic Cooperation and Development estimated. Therefore, a regular McDonald's employee brings home nearly 44% of that amount. Their colleagues stateside earn about $7,473 a year and take home as much as 24% of the U.S. average annual disposable income of USD 30,563.

That is not the first time McDonald's has been criticized for its low levels of compensation. The fast-food chain often emphasizes that it pays more than USD 10 per hour at its stores, but the firm has not pre-defined pay standards at its franchise locations.

It is worth mentioning that McDonald's owns only 2,770 out of its 37,855 stores worldwide, meaning that the rest 35,085 locations are franchised. 

The U.S. Department of Labor proposed enforcing back an Obama's administration regulation to hold all the franchisers liable as ''joint employers'' for violations of federal minimum wage laws. The President's Trump proposal in that regard is quite different. It aims to exempt all the franchisers from any joint-employer liability.

The fast-food chain recently announced its plans to stop lobbying against the pay increase. Moreover, it would also stop supporting the minimum wage increases. As a vast majority of its locations are franchised, the company would not be required to pay a higher wage under the proposed regulations.

McDonald's has often been accused of paying its workers such a low amount to keep some below the poverty line. According to federal data, the poverty line for the single-person household income amounted USD 12,140. The McDonald's average salary of USD 7,473 is 38% below the single-person poverty line.

What do you think? Do you agree or disagree that McDonald's and other franchisers should be liable as joint employers for violations of federal minimum wage laws?